Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.22.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of Earnings Before Income Taxes by Jurisdiction
The sources of Earnings before income taxes were as follows:
(in millions) 2022 2021 2020
United States $ 603.2  $ 537.0  $ 354.5 
Foreign 250.4  199.4  118.2 
Earnings before income taxes $ 853.6  $ 736.4  $ 472.7 
Schedule of Components of Income Tax Provision (Benefit)
The Income tax provision consisted of the following:
(in millions) 2022 2021 2020
Current tax expense:
U.S. Federal $ 109.8  $ 84.3  $ 66.9 
State and local 20.3  11.2  9.8 
Foreign 61.1  67.3  38.9 
Total current 191.2  162.8  115.6 
Deferred tax (benefit) expense:
U.S. Federal (24.6) (4.9) (17.3)
State and local 1.5  (5.9) 1.1 
Foreign 4.2  (11.0) (1.4)
Total deferred (18.9) (21.8) (17.6)
Income tax provision $ 172.3  $ 141.0  $ 98.0 
Schedule of Deferred Tax Assets and Liabilities
Temporary differences and carryforwards giving rise to deferred tax assets and liabilities as of December 31, 2022 and 2021 are summarized in the table below:
(in millions) 2022 2021
Deferred tax assets:
Loss carryforwards $ 56.8  $ 92.6 
Tax credit carryforwards 52.9  57.6 
Deferred revenue 36.3  23.0 
Product warranties 33.6  28.1 
Sales incentives and discounts 29.2  21.7 
Operating lease liabilities 24.4  15.7 
Interest expense 18.0  0.1 
Equity compensation 13.5  13.8 
Compensation and benefits 3.8  26.9 
Other 62.4  68.7 
Gross deferred tax assets 330.9  348.2 
Valuation allowance (52.8) (97.9)
Deferred tax assets 278.1  250.3 
Deferred tax liabilities:
Depreciation and amortization (81.7) (59.3)
State and local income taxes (22.7) (22.7)
Operating lease assets (21.8) (14.4)
Other (9.3) (11.0)
Deferred tax liabilities (135.5) (107.4)
Total net deferred tax assets $ 142.6  $ 142.9 
Reconciliation of Unrecognized Tax Benefits
The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties for the 2022, 2021 and 2020 annual reporting periods:
(in millions) 2022 2021 2020
Balance as of January 1 $ 9.7  $ 3.7  $ 3.7 
Gross increases - tax positions prior periods 0.5  5.9  0.1 
Gross decreases - tax positions prior periods (2.1) (0.2) — 
Gross increases - current period tax positions —  0.5  0.6 
Decreases - settlements with taxing authorities (0.6) (0.2) (0.1)
Reductions - lapse of statute of limitations —  —  (0.6)
Balance as of December 31 $ 7.5  $ 9.7  $ 3.7 
Reconciliation of Income Taxes at the Statutory Federal Income Tax Rate to Income Tax Provision (Benefit)
The difference between the actual income tax provision and the tax provision computed by applying the statutory Federal income tax rate to Earnings before income taxes is attributable to the following:
(in millions) 2022 2021 2020
Income tax provision at 21 percent $ 179.3  $ 154.6  $ 99.2 
State and local income taxes, net of Federal income tax effect 19.5  18.0  11.6 
Deferred tax asset valuation allowance (10.4) (24.2) (0.2)
Equity compensation (2.9) (1.8) (1.1)
Change in estimates related to prior years and prior years amended tax return filings (1.3) 3.5  0.9 
Federal and state tax credits (16.6) (14.9) (12.0)
Taxes related to foreign income, net of credits 12.1  5.5  0.7 
Deferred tax reassessment 6.4  6.4  5.4 
FDII deduction (18.4) (15.3) (11.4)
Other 4.6  9.2  4.9 
Actual income tax provision $ 172.3  $ 141.0  $ 98.0 
Effective tax rate 20.2  % 19.1  % 20.7  %